Summary
- Capital A, the parent company of AirAsia, has made its structure easier to know with 4 distinct operating segments: Aviation, Asia Digital Engineering, Teleport, and MOVE.
- Within the second quarter of 2023, Capital A saw a sturdy recovery with revenues of RM3.2 billion and EBITDA of RM462 million, representing year-on-year growth of 115% and 325%, respectively.
- The group is actively returning aircraft to service, with plans to have 200 aircraft back in operation by the tip of the yr. Ancillary revenue is increasing, and the launch of AirAsia Cambodia is predicted to drive further growth.
Following the fortunes of AirAsia and its parent Capital A has not all the time been easy, what with six financial quarters, the Group’s Practice Note 17 status or the labyrinth of varied operating firms. Thankfully, that has modified, and the 4 short-haul airlines are actually all under the one umbrella grouping of Asia Aviation Public Company Limited (AAV).
Capital A is now much easier to follow
The structure of the parent company Capital A Berhad can be easier to know now there are 4 distinct operating segments, being Aviation, Asia Digital Engineering (ADE), Teleport and MOVE ( formerly referred to as AirAsia Digital). This week, Capital A released its unaudited financial results for the quarter that ended June 30, 2023, and the image across the group is certainly one of robust recovery and a powerful second half of the yr.
Photo: Jaggat Rashidi/Shutterstock
Capital A (the Group) generated revenues of RM3.2 billion ($704 million) and posted earnings before interest, tax, depreciation and amortization (EBITDA) of RM462 million ($101.6m), representing year-on-year growth of 115% and 325% respectively. Capital A CEO Tony Fernandes said that through the second quarter (2Q2023), AirAsia Group had increased its effective control of Philippine AirAsia to 100%, adding:
“I’m thrilled that [in] my journey of 21 years of running AirAsia, we’ve got finally brought together the 4 short-haul airlines under Asia Aviation Public Company Limited, comprising AirAsia Malaysia, AirAsia Thailand, AirAsia Indonesia and AirAsia Philippines within the 2Q2023 financial performance.
“This strategic move allows analysts and investors to have a clearer view of our accounts.”
The engine of the Group is Aviation, and in 2Q2023, the business generated revenue of RM2.9 billion ($638m) and an EBITDA of RM405 million ($89m). It carried 77% of the passengers in 2Q2019, and seat capability reached 74% of the 2019 level, resulting in a passenger load factor of 87%. Average fares have fallen by 4% year-on-year, but at RM205 ($45) are 15-20% above 2Q2019.
Still returning aircraft to service
On Tuesday, AAV said it has successfully taken 175 of its Airbus aircraft out of storage with 54 still inactive, and it expects to have 180 back in operation by the tip of the third quarter. By the tip of this yr, AAV plans to have 200 aircraft back in service, leaving around 29 aircraft still sidelined because it struggles to have enough seats on offer to fulfill the consistently high demand.
Photo: AirAsia
AAV CEO Bo Lingham said the group had a confident outlook on aviation prospects “as we now have line of sight on the complete reactivation of our fleet.” Ancillary revenue, from selling bags, seat allocations, meals etc., is an enormous a part of the low-cost carrier model, and AAV is increasing income from those activities. The group forecasts that passenger ancillary revenue will reach $359 million within the second half of this yr, up by 27% in comparison with pre-COVID levels. Lingham also pointed to “the approaching launch of AirAsia Cambodia” as one other area of growth for the AAV group.
Aviation Services (ADE) posted segmental revenue of RM138 million ($30.4m) and EBITDA of RM36.8 million ($8m), up by 83% and 37% year-on-year, respectively. ADE has expanded its hangar facility by adding two extra maintenance lines, but despite that, all available slots for its seven lines are fully booked until June next yr. Because of this getting the entire AirAsia fleet back in service is taking more time than the group would really like.
Logistics group Teleport increased 2Q revenue by 69% year-on-year to RM167 million ($36.7m) and earned EBITDA of RM9.2 million ($2m) after posting a loss in 2Q2022. The gains mainly got here from increased belly hold freight capability from each returning AirAsia aircraft and partnerships with third-party airlines, in addition to solid growth from e-commerce activities.